Latest / Early Edition with Ryan Bridge / Malcolm Fleming: NZ Certified Builders CEO on construction activity hitting a ten year low

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Malcolm Fleming: NZ Certified Builders CEO on construction activity hitting a ten year low · Early Edition with Ryan Bridge

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  Speaker 1: Data from Stats New Zealand shows construction activities at a
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  Speaker 1: ten year low. The number of ongoing jobs dropped three
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  Speaker 1: point five percent between the December and March quarters. Residential
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  Speaker 1: activity fell two point two percent, while non residential dropped
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  Speaker 1: four percent. Malcolm firming A is the CEO of New
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  Speaker 1: Zealand Certified Bills and he joins me this morning.
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  Speaker 2: Good morning, Malcolm, Good morning, Francesca.
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  Speaker 1: So is it feeling like a ten year low? Is
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  Speaker 1: that what you're seeing.
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  Speaker 2: It's not feeling like a ten year low. Feels certainly
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  Speaker 2: like challenging times are continuing, and we have had challenging
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  Speaker 2: times this last couple of years. Are those being the
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  Speaker 2: last and ten years? It doesn't feel that way.
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  Speaker 1: Okay? How much is the around war slowing the construction
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  Speaker 1: construction sector?
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  Speaker 2: So I know the biggest drop in construction activity was
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  Speaker 2: in the commercial space. And it do get a sense
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  Speaker 2: that some of those various jobs that have been keeping
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  Speaker 2: some of those companies going for the last three four years,
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  Speaker 2: some of those big projects have been grinding on while
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  Speaker 2: we've been in challenging times. By coming to an end
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  Speaker 2: and some of those commercial contracts contractors, there's no big
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  Speaker 2: project to replace them, so that's sort of been playing out.
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  Speaker 2: But in the residential space that I represent with Design
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  Speaker 2: certified dollars, we're seeing we're seeing some really good signs
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  Speaker 2: at the tail end of last year and into this
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  Speaker 2: year that activity was starting to increase, and we're seeing
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  Speaker 2: building contracts being downloaded to great extents and employment contracts
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  Speaker 2: been taken out by builders, et cetera. So some confidence
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  Speaker 2: returning to the market that's been extinguished to a good
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  Speaker 2: degree by their war of course, and consumer confidence has
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  Speaker 2: dropped a little bit. But talking to members just yesterday
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  Speaker 2: and I had the regional leaderships around the country, about
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  Speaker 2: twenty five builders in the room, there's certainly the pipeline
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  Speaker 2: of work confront of them is starting to reduce. So
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  Speaker 2: the fact yesterday those with more than eight months with
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  Speaker 2: the work in front of them is certainly less than
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  Speaker 2: it was back say in March, for example. But they're
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  Speaker 2: just they're adapting. Talking to a builder in Taranaki yesterday,
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  Speaker 2: they're unsuccessful at the new house, but it managed to
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  Speaker 2: pick up a commercial fit out so that they don't
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  Speaker 2: normally do. So they've got that ability to adapt and
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  Speaker 2: do works that they don't typically do. Just to keep
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  Speaker 2: on going welcome.
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  Speaker 1: How quickly can the industry turn around.
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  Speaker 2: There's a lot of capacity within the industry to be
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  Speaker 2: able to get on to do works. So think about
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  Speaker 2: our members in particular, they've got their core groups that
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  Speaker 2: they continue to keep going. They are looking for additional work.
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  Speaker 2: They can flex and move with additional demand quite quickly
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  Speaker 2: as we ramp up. The big problem here, of course,
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  Speaker 2: is looking further down the track in terms of people
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  Speaker 2: that are coming into training. So we've lost a lot
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  Speaker 2: of people through training over the last couple of years,
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  Speaker 2: and that's a future pipeline of schooled workers.
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  Speaker 1: Okay, when you talk about the commercial pipeline and sort
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  Speaker 1: of it's sort of drying up a little bit. Do
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  Speaker 1: we know why that is or is that just is
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  Speaker 1: it just sort of something that happens. It's a cycicle thing.
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  Speaker 2: We've lost a lot of central government works. It was
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  Speaker 2: stopped a number of years ago, and of course, as
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  Speaker 2: we talked about earlier, those existing projects kept on grinding
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  Speaker 2: on through, but they're not being replaced. In the commercial
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  Speaker 2: area as well, which is the main of say partner buildings.
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  Speaker 2: There's not a lot of new apartments being built because
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  Speaker 2: they're not in the demand for it, so we again
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  Speaker 2: getting back to that whole infrastructure discussion, cushion and commitment
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  Speaker 2: for long term infrastructure build hospitals and schools like bar stations,
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  Speaker 2: universities and those sorts of thingks.
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  Speaker 1: Malcolm Fleming, thank you so much for your time this morning,
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  Speaker 1: really appreciate it. For more from Early Edition with Ryan Bridge,
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